SHRI. M.NANDA KUMAR, L/R SMT. JAYASHREE R,BANGALORE vs. INCOME-TAX OFFICER, WARD-7(2)(3), BANGALORE

Page 2 of 14 & 357/Bang/2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals are filed by the assessees against separate orders dated 12.11.2018 passed by the Ld.CIT(A)-7, Bangalore for A.Y. 2015-16.

1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”

Page 4 of 14 & 357/Bang/2023 2.8. Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, we find it fit to condone the delay caused in filing the present appeal as it is not attributable to the assessee. Accordingly, the delay in filing the present appeals in case of both the assessees stands condoned.

Page 6 of 14 & 357/Bang/2023 3.6. Shri M. Nanda Kumar thus denied the receipt of sale consideration since the mode of Sale Consideration and the quantum of sale consideration paid to each member of the family was not found mentioned in the aforesaid sale deed dtd: 01-09- 2014. 3.7. Shri M. Nanda Kumar submitted that M/s. Astro Land Developers have entered into a Sale Agreement dtd: 01-09-2014 with him to sell/allot 14,750 sq.ft of Sital Area with all the civic amenities in the layout proposed to be formed in Sy. No. 58, situated at Chikkanayakanahalli, Varthur Hobli, Bangalore East Taluk measuring 6 Acres 30 Guntas in lieu of the sale consideration due to him which is considered at the same valuation in the other property developed by the Vendor herein by formation of the residential layout with all amenities and facilitates. 3.8. It is submitted that the sale of aforesaid agricultural lands measuring 2 Acres 20 Guntas by Shri M. Nanda Kumar and his family members was on a barter system that in lieu of sale consideration of Rs. 3,00,00,000/- the family of Shri M. Nanda Kumar were entitled for allotment of site area measuring 14,750 sq.ft. 3.9. It was further submitted that the Purchasers M/s. Astro Land Developers did not allot the sital area to Shri M. Nanda Kumar and his family as per the Sale Agreement dtd: 01-09-2014 and therefore the consideration of Rs. 3,00,00,000/- stated to have been paid to Shri M. Nanda Kumar and his family was not paid. Hence in the absence of the receipt of the Sale Consideration, Shri M. Nanda Kumar and his brother is not liable Page 7 of 14 & 357/Bang/2023 for capital gain tax as computed by the Ld.AO in the Assessment Order. 3.10. Without prejudice to the above submissions, the assessee also submits that even for the sake of argument without conceding to the receipt of sale consideration of Rs. 3,00,00,000/- as per the recitals of the sale deed, that the 10 Vendors named in the sale deed were entitled to 1/10th of the Sale consideration of Rs.3,00,00,000/- out of which each share of the coparcener amounts to Rs.30,00,000/-. Accordingly, the share of the assessee subject to the sale agreement dtd: 01-09- 2014 for allotment of 14,750 sq.ft, the individual share of the assessee ought to have been considered at Rs. 30,00,000/- as against of Rs.1,50,00,000/-. Therefore the addition made by the Ld.AO of Rs. 1,46,94, 817/- being the presumed LTCG is bad in law and hence the same is liable to be deleted. 3.11. The Ld. AO further computed the capital gains of the sale of property bearing No. 1422, HSR Layout, Bangalore at Rs.28,22,370/- after providing deduction of Rs.1,33,630/- being the Indexed Cost of acquisition out of the Sale Consideration of Rs. 30,00,000/-. In this regard the assessee submits that the above property was allotted vide Letter No. BDA/DS- 1/HSR:2:1422:2013-14 dtd: 09-01-2014 in favour of the assessee under the incentive Scheme for Voluntary surrender of Land Rules 1989. It was submitted that the Allotment of the above site was made in favour of the assessee for the sake of convenience whereas the said site belongs to all the 10-family members inclusive of assessee since the surrendered land was an Ancestral property and therefore the share of the assessee Page 8 of 14 & 357/Bang/2023 amounts to Rs. 3,00,000/- as against Rs. 30,00,000/-. Therefore the LTCG computed by the Ld.AO at Rs.28,22,370/- on a Sale Consideration of Rs. 30,00,000/- is not justifiable in law.

Page 9 of 14 & 357/Bang/2023 143(3) of the Act dtd: 29-12-2017 determining the total income at Rs.1,49,21,000/- as against the declared income of Rs.2,26,290/-. The Ld. AO has made an addition of Rs.1,46,94,817/- being the LTCG arising out of a Sale of Ancestral Agricultural land measuring 2 Acres 20 Guntas in Sy. No. 54, situated at Chikkanayakanahalli, Varthur Hobli, Bangalore East Taluk. Remaining facts similar to that as mentioned in paras 3.3 to 3.8 hereinabove. 5.4. Before this Tribunal, the Ld.AR submitted that the sale consideration of Rs. 3 crores was never paid by the purchaser. The entire computation of capital gains by the Ld.AO is bad in law in the case of Shri M. Nanda Kumar who is represented by L/R Smt. R. Jayashree and in the case of Shri M. Narendra Kumar. 5.5. The Ld.AR in support relied on the decision of Hon’ble Jaipur Bench in case of ACIT vs. Ijjaraj Singh in ITA Nos. 152/JP/2019 & 91/JP/2019 vide order dated 18/06/2020 in support of his contention. 5.6. In respect of the property at HSR Layout, the Ld.AR submitted that the site is received from the BDA in lieu of ancestral property that was acquired and the date of acquisition is taken as 01/04/1981. The date of the transfer is considered by the assessee to be 28.04.2014 for a sale consideration of Rs.30 Lakhs. However the Ld.AR submitted that the Ld.AO computed the entire capital gains of Rs.28,22,370/- in the hands of the assessee being Shri Nanda Kumar. It is the submission of the Ld.AR that this being ancestral property that was Page 10 of 14 & 357/Bang/2023 surrendered to the BDA for formation of the road, the sale consideration belongs to all the 10 co-parceners of the family and the assessee before this Tribunal owns 1/10th each share. The Ld.AR thus reiterated his arguments of computing the capital gain in accordance with the share of the assessee being one of the persons in the co-parceners. The Ld.AR further submitted that assessee had claimed exemption u/s. 54F which was denied for the reason that there was no construction of residential house which is an admitted fact. 5.7. The Ld.DR on the contrary submitted that the entire facts requires a denovo verification based on various evidences that assessee may file.

Page 11 of 14 & 357/Bang/2023 The claim of section 54F has been denied for the reason that the assessee have not received the site and could not construct the house property thereon. 6.3. We note that assessee had allegedly sold land of 2 Acres 20 Guntas bearing survey no. 54 at Chikkanayakanahalli, Varthur Hobli, Bangalore East Taluk to M/s. Astro Land Developers for a sale consideration of Rs. 3 Crores on 01.09.2014. It is the submission of the assessee that assessee has not received the sale consideration at all. He further submitted that the land sold in the sale deed that is placed at pages 4 to 18, assessee is one of the co-parceners among the 10 persons, the details of which have been listed hereinabove. 6.4. The Ld.AR has vehemently submitted that assessee has never received any consideration against the said sale of land to M/s. Astro Land Developers. On perusal of the said sale deed, we note that there is an admission by the vendors being the assessee, his brother and the co-parceners have acknowledged and confirmed the receipt of Rs. 3 crores from the purchaser in clause 1 and 2. Further we also note that in clause 13(a) and 13(b) being the concerned assessees before us, TDS have been deducted against the amount paid by the purchasers the details of which have been provided therein. 6.5. For the sake of convenience, the said clauses are reproduced as under:

Page 12 of 14 & 357/Bang/2023 6.6. We note that the allegation of the Ld.AR that the consideration has not been received by the assessee, his brother and other co-parceners has not been verified by the Ld.AO. We direct the Ld.AO to call upon the purchaser and to carry out necessary verification in this regards. We direct the Ld.AO to verify the TDS details that are mentioned in the sale deed in clauses 13a and 13b. We direct the Ld.AO to call upon the purchasers and to verify the treatment given to this transaction in his hands. Assessee is directed to establish that they have not received the consideration under this agreement so as to apply the ratio laid down in the decisions relied by Ld.AR. 6.7. In regards to the property at HSR Layout, the Ld.AO is directed to verify the land records to identify whether it is ancestral property. Assessee is directed to file all relevant details to support all his contention that the said land that was surrendered to BDA is an ancestral property belonging to the 10 co-parceners. 6.8. The claim of section 54F then needs to be considered in accordance with law if there is a transfer in the hands of the Page 13 of 14 ITA Nos. 356 & 357/Bang/2023 assessees depending on the share of the assessees received in the form of capital gains from the above two properties during the year under consideration. We direct the Ld.AO to ascertain the exact share of the assessees in respect of the properties that are under consideration and then to compute the benefit arising in the assessees’ hands u/s. 54F in accordance with law if there is a transfer. All necessary criteria for claiming section 54F may also be verified. 6.9. Based on the above directions, the entire facts may be reverified by the Ld.AO denovo. Assessee is directed to file all the details filed in respect of the sale of ancestral property and the period during which the sale consideration was actually received if any in order to ascertain the correct share in the hands of the assessee.